Growth March 9, 2020

Increase revenue by replacing your free trial with a 30-day money-back guarantee

Growth Bites @growthbites

Increase your revenue by replacing your free trial with a 30-day money-back guarantee.

Lilia Tovbin of HelpTeaching.com ($40,000/mo) credits this, in part, for the 100% increase in revenue she saw for three years in a row after implementing it. It kept risk low for her potential users without sacrificing income. According to one study, money-back guarantees evoke a positive emotional response in the consumer, making them more likely to buy at a premium price. They may even weed out low-quality leads and increase trust in your product.

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  1. 2

    Consider testing 60 and even 100-day money-back guarantees. Sometimes churn will be less the longer you let them use the product.

    1. 2

      With money back guarantees, do you still charge them as a normal user from the get go?

      E.g.

      I sub to a $50/m tool, then within 2 months (60 days maybe after the first payment left). I unsub then get my refund?

      Sorry, just wanted clarity on the concept.

      1. 3

        Yes.

        You'll be switching from an offer that says you can "try it free and see if you like it," which implies you might not like it.

        Compare that to the offer that says, "we're so confident you'll like it, we'll give you your money back if you change your mind."

        See the difference?

        1. 4

          Even better, tie your money back guarantee to your value proposition.

          You say you'll help me increase productivity/sales/happiness.

          "If you don't increase your productivity/sales/happiness by 20% in the first 30/60/90 days, we'll give you a full refund."

          That just shows huge confidence in your product and brings people back to the reason they are purchasing

        2. 2

          That's beautiful, I love that concept. I can imagine how this reduces churn drastically. I'm going to look into applying this to my product.

          Thanks for the clarity

          1. 1

            Love this discussion. And that's great point @Grendorf - thanks!

  2. 1

    Interesting but I don't see any free trial with a 30 day money back guarantee on HelpTeaching: https://www.helpteaching.com/subscription/index.htm

    Did they change their pricing method recently? And if yes, why?

    1. 1

      You're right, it looks like they switched it at some point after their interview. The founder sold the company so the new owners must have decided to take a different direction.

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